Gold jumps to 3-week high as Coronavirus fears mount

Gold prices rose in European trade on Monday, extending gains for the third straight day, and touching a 3-week high, on increased safe-haven demand, as mounting fears over the spread of the new Coronavirus in China spooked investors.

Gold prices rose 0.5% to $1,588.43 an ounce (the highest since Jan. 8), after opening at $1,581.20, and hitting a session-low of $1,575.88.

The yellow metal gained 0.5% on Friday, to post its second straight daily gain, on strong safe-haven demand.

During the past week, gold prices gained 0.9%, and logged the sixth weekly gain in seven weeks, amid escalating jitters in the market.

Most stock markets around the world continued to drop on Monday, as investors averted high-yield assets in favour of safe havens, amid the mounting fears about an outbreak of the new Coronavirus in China, and its negative impact on the Chinese economy.

The coronavirus has infected 2,682 cases in China, and its death toll rose to 81, according to Chinese news agencies.

The Chinese government declared a state of emergency in the country, extended the Lunar New Year holiday for additional three days until Feb. 2, and ordered companies in Shanghai to postpone work until Feb. 9 at least.

Gold holdings at the SPDR Gold Trust, rose by 1.76 metric tonnes on Friday, to a total of 900.58 mt (the highest since Nov. 8).